European used car price inflation is slowing down reports INDICATA
Used car inflation is slowing down across Europe according to the latest INDICATA Market Watch used car insights report.
European used prices were just 0.3% higher from the start of August moving into September compared with the high prices experienced in late 2021 and early 2022.
Discounting Turkey where mega inflation has forced used prices up by 117% points since the end of 2021 prices on average have risen by 9.9% in Europe during 2022. Austria (12.1%), Portugal (11.6%), Spain (11.2%), Belgium (11.1%), France (10.7%) and Italy (10.2%) have all experienced a double-digit price increase. Only the United Kingdom have experienced a price fall in 2022 of -3.6%.
Are used cars beginning to stabilise?
“We will have to wait and see whether this is an early sign that used car prices are beginning to stabilise. Used car sales continue to be compromised by stock shortages and some markets are reporting a softening in retail demand caused by a rise in inflation,” explained Andy Shields, INDICATA’s global business unit director.
“New car supplies remain restricted which is contributing to fewer ex-fleet and ex-rental cars hitting the used market. These dynamics are working together to shape a used car industry that has experienced huge change over the past two years.
Stock falls for third month running
“There are no signs that prices or demand will plummet anytime soon, but it’s the first sign we have seen in 2022 that the market might just be settling down at its ‘new normal’,” he added.
August sales in Europe were 10.6% lower than for the same period in 2021, partly hampered by stock constraints which fell for the third consecutive month, and consumers spending money going on holiday rather than buying a used car. Only France reported a year-on-year increase in sales (29.9%) which was fueled by a rise in manufacturer-backed registrations of sub-12-month-old used cars.
Starved of used cars
The Portuguese and Spanish market continue to be starved of used cars at a time when historically daily rental companies would be reducing the size their fleets at the end of summer. To reinforce the size of the problem, in Portugal dealer stock levels fell by 13.0% between 1 August and 1 September.
Used EVs which have been the source of many used car stories from INDICATA in 2022 saw a fall in sales based on a shortage of stock and soaring energy prices dampening demand. However, those used EVs that were in demand experienced a stock turn better than all other powertrain types.
Diesel stock turn remains strong
A boom in new hybrid car sales prior to the pandemic continues to satisfy current used car demand, while diesel stock turn remains strong despite falling from favour with many buyers.
“It is another market anomaly where the high price of EVs is putting off some drivers from going electric while others cannot get into an EV quicker enough. The next two or three years of the used market look set to be very interesting,” said Shields.
For a free copy of the latest INDICATA Market Watch report go to www.indicata.com